Leni Gas & Oil plc today announces potential short-term impacts following the recent announcements by Leed Petroleum plc (“Leed”).
Leed has notified the Company that with immediate effect it has temporarily suspended production from the Eugene Island -184 (“EI-184″) and Ship Shoal-201 (“SS-201″) platforms where LGO has interests in the Gulf of Mexico. This follows the decision of Leed’s Board of Directors to cease business operations at the end of March. LGO holds net royalty interests in the EI-184 development ranging from 2.50540% to 6.04167% and receives a 0.4714% overriding royalty interest from SS-201. Leed has indicated that these suspensions are expected to be temporary and will be reviewed once their principle creditor, UniCredit Bank AG (“UniCredit”), has appointed a receiver.
Production from EI-184 has been seriously constrained during 2011 awaiting the planned recompletion of the A-8 well and consequently the present shut-in has only marginal impact on the Company’s financial projections for 2011. The longer term impact is considered to be a deferral of production which is expected to be restored with reserves recovered at a later date.
The Company continues to monitor the situation closely and has notified Leed and UniCredit of its wish to see production operations restored without delay.
About Leni Gas & Oil Plc
Leni Gas & Oil Plc is a newly incorporated company that has been established by its shareholders to identify and acquire a number of projects in the oil and gas sector with particular emphasis on projects that are in production or with previously explored hydrocarbons. Such may be acquired by direct investment, or by acquiring all or part of an existing or newly formed company or business; in each case, the company intends to be an active investor.
Source: Leni Gas & Oil , April 5, 2011;